Women-led companies excel, creating investment options

It's been well documented that women are underrepresented in corporate boardrooms. As recently as 2016, men held five out of every six board seats at Fortune 1000 companies, according to the Missing Pieces Report: The 2016 Board Diversity Census of Women and Minorities on Fortune 500 Boards.

Less well known, but also well documented, is the fact that having women in the boardrooms turns out to be good for business.

What about leveraging the trendlines from that research into strong investment options? That's what drives Suzanne Mestayer

"There is already some level of success with getting women onto boards and into C-suites, but most people do not think about it in terms of the potential financial rewards for investors," said Mestayer, managing principal of ThirtyNorth Investments LLC.++

ThirtyNorth, which is based in New Orleans, last April introduced its Women Impact Strategy Separately Managed Account in response to independent market research, as well as its own findings on the stock performance of companies with female board members.

The Women Impact Strategy account was born out of ThirtyNorth's own research showing that companies with women on their boards exhibit a greater stock performance than those that don't. ThirtyNorth evaluated the makeup of boards of companies in the S&P 500 Index and tracked their stock performance over a 10-year period. The portfolio of companies with one or more women on their boards outperformed the portfolio with zero female board members. And companies with 25 percent or more women on their boards outperformed both of those portfolios.

ThirtyNorth saw fertile investment ground.

The Women Impact Strategy portfolio consists of 50 stocks belonging to companies with a minimum of 20 percent female board members and at least one woman in the executive suite..

The ratio of female board members has been improving slowly in the face of initiatives such as 2020 Women on Boards, a nonprofit campaign to increase the percentage of women on U.S. boards to 20 percent or greater by 2020. According to the campaign's findings, women held 18.8 percent of the board positions for Fortune 1000 companies in 2016. That percentage marks an increase since 2011, when women held 14.6 percent of Fortune 1000 board positions.

As the Women Impact Strategy account nears its one-year anniversary, its performance appears to be consistent with the research that influenced it. The account has outperformed the Russell 3000 Index++ by 1.88 percent net of fees since the account's inception.

"This is not about women being better board members than men," Mestayer said. "This is not about women being better CEOs than men. This is about the concept that having diversity at the table improves performance."

++ Disclosures: ThirtyNorth Investments, LLC, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio.

Performance results are presented net-of-fees and reflect the reinvestment of dividends and capital gains. Short-term results are much less reliable than returns generated over a longer time frame.

Historical performance results for the Russell 3000 Index do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. There are no assurances that an investor's portfolio will match or outperform any particular benchmark.

*From Credit Suisse Research Institute's "The CS Gender 3000: The Reward for Change" report, September 2016